We have seen lots of acquisitions of smaller brands or startups taking place by major companies from Silicon Valley. However, we are currently in the midst of a pandemic and it is important to note that a global recession is looming. Still, we are getting news of a major acquisition being done by Facebook which is the largest social media network in the world right now. But we also understand this because social media consumption has grown 10x during this lockdown period and the company would want to give an even better experience for its users.
Facebook has announced that they are acquiring Giphy which is a GIF-making and sharing platform. Putting this into context, Facebook will now integrate Giphy inside Instagram which has become very popular in the last few years because of its reach and simplicity.
However, there is also the fact that Giphy was being used by many major platforms apart from Facebook since it provides APIs for sourcing GIFs inside their platform. This means that those platforms will also feel the pinch since Facebook can pull the plug on those APIs anytime and the other platforms would be left wondering.
Right now, Instagram’s VP mentions that “People will still be able to upload GIFs; developers and API partners will continue to have the same access to Giphy’s APIs, and Giphy’s creative community will still be able to create great content,”. But we, and most others, know that companies can change their minds very quickly and it is obvious that platforms such as Twitter, Reddit and others will be already looking at alternatives.
As far as Giphy is concerned, the platform has been running from last 7 years after being founded in 2013 and they claim to have “several trillion GIFs” inside their database. The team states that they have already been working with Instagram for years and are “thrilled” to formally join the Instagram team.
While the money involved in this acquisition has not been disclosed by either Facebook or Giphy, it has been reported by Axios that the deal is worth $400 million which many say is a lot for a GIF platform. But we can argue that the userbase and collection of GIFs on the platform justify the price that Facebook is paying for this acquisition.
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